Commission considers extending coal property lease agreement

By RICHARD SHAWStaff reporter

In the regular meeting last Wednesday, the Carbon Commission heard from Bill Reeves, Western Reserve Coal Company president, and Nick Sampinos, the local attorney representing the firm, about extending a lease that the company has had with the county since about 1970.

"The existing lease expires in March of 2007," explained Sampinos. "The company is presently negotiating with various companies that are exploring reopening the old Columbo mine that is located on some of that property. We would like to look at extending that lease for 10 more years and also in discussing some of the details about the agreement as well."

The Columbo mine is located between the dam at Scofield and the town of Scofield itself on the east side of the reservoir. It was operated in the 1960s and, according to some sources, has a great deal of coal still in it.

The lease, however, has several problems. While there are more than 4,000 acres under lease to Western, 1,200 acres of the same ground is also being leased to Skyline mine. The situation is naturally of concern to Western and Skyline as well.

"If the county will work with us on this lease, Western will give up that 1,200 acres within the confines of the lease," stated Sampinos.

Reeves pointed out that the rest of the section plus parts of two others would encompass the lease, more than 3,400 acres in all.

Commissioners wondered about the amount of coal that could be extracted from the area and Reeves said test drilling showed "4800 million tons" of the black material looked to be present, based just on their drilling.

Another matter that concerns Western is the assignability of the lease to another company should they sell the rights to mine the coal.

"The present lease is very ambiguous when it comes to assignability," Sampinos told the commissioners. "We would like to be able to assign on a sale."

Commissioners agreed that that was important, but added they did have concerns about the situation of assignment as well.

"We would like the right to some review of any company that would want to come in and mine," stated Commissioner Mike Milovich. "We have had some experience with fly-by-night companies coming in and saying what they intend to do and then they don't perform."

Sampinos told the commission, Western was certainly not against that but just needed the county to agree more clearly to assignments. It appears time is of the essence in this situation.

"It takes three to four years to get mine permits to start work," explained Reeves. "Obviously, if we don't get an extension it would do no good to even start on this."

Commissioners agreed to an extension and to work out the bugs.

"We are very interested in this," stated Commission chair Bill Krompel. "The royalties would be good, but the jobs it would provide are in the counties interest as well."

Krompel, however, was also concerned about how the same piece of ground was leased to two different companies.

"How many more of these conflicts are there out there that we don't know about?"

Milovich pointed out that many areas have had similar problems and that some counties have full time people that are just sorting out these types of matters.

Milovich also pointed out that the county has been exploring new kinds of software systems to catch such problems. All the commissioners currently have information on the programs and are studying it at present.

In other business, the commission discussed a business license which has been languishing in the clerk's office due to a lack of liability insurance for a rock concert at the fairgrounds indoor arena.

The group that wanted the license also had applied for a beer license.

The commissioners decided that, even if the insurance problem were resolved, the county would probably deny the license.

The lawmakers felt that a heavy metal concert, with beer being sold during the event, may not be a good combination of activities.

Acting on an unrelated matter, the county commissioners approved a surface use agreement with Phillips Petroleum to put two wells on property the county owns in connection with the fairgrounds.

In connection with the approval, the county will bring power into the area for the regional fire training tower and pay for it while Phillips will provide about $10,000 in concrete to pave the area around the tower that was just recently finished by a Wisconsin firm.

During last week's public meeting, Price city engineer Gary Sonntag updated the county commission on the water line that is still being installed from Price Canyo.

The majority of the Price engineer's comments related to Carbonville Road and what work the city planned to do on it now that the line is done in that area.

"In conversations with Ray Hanson (county road supervisor), the city has agreed to put a five inch overlay on the road," stated Sonntag.

"We initially put in a three inch pave patch to get us through the finish of construction and into next spring. That five inch overlay will be done next spring to smooth out the imperfections in the road," added the Price city engineer.

Commissioner Tom Matthews questioned the Price city engineer about what would be done in connection with the shoulder and driveways as well.

"I believe we have solved the problems with gravel and fill, but there is still some work to be done there as well," Sonntag stated. "I think we have fixed many of the problems. It's too late in the season to complete all of this now however. We will be taking care of it in the spring."

There was then some discussion, brought about by Milovich, concerning the counties intention to revamp the road.

"I hate to see the city spend a bunch of money to fix this road and then just have it torn up again soon after," he said.

Commissioner Bill Krompel pointed out that unless everything went exactly right, the proposed improvement project on the road would not start to undergo construction until 2004.

"We have the money for the utility relocation (in excess of $400,000) and the engineering (over $100,000), but not for the actual construction at this point," indicated Krompel.

"However, after the meeting with residents tomorrow night (Nov. 21), we will know more. We will then be able to proceed with applying for the money from the Utah Department of Transportation and other grants to upgrade the road," added Krompel.

Sonntag pointed out that the city was planning on spending nearly $120,000 on the road to repair it next spring.

The county commissioners and the Price city engineer agreed that the officials would work to speed up the process for the upgrade to see if at least some of that money could be saved.

Addressing an unrelated business matter at last week's public meeting, the commissioners approved an ordinance adopting the accepted international mechanical, residential plumbing and building guidelines as well as the National Electric Code for the county.

The codes approved by the lawmakers will be enforced by the building and planning department of the county.